Private discussions are believed to have been held on expanded nuclear cooperation between Pakistan’s president Asif Ali Zardari and Chinese leaders during Zardari’s four-day visit to China, which began Tuesday.

A senior Pakistani government official, familiar with discussions between Zardari and Chinese officials, claimed Thursday that China had agreed to “consider further nuclear power reactors to fulfill our needs. The relationship (on the nuclear issue) remains intact”. Speaking to CBS News on condition of anonymity, the official added, “there is now a complete understanding on our future cooperation”.

China has installed a 325-Megawatts nuclear power reactor at Chashma, in Pakistan’s central Punjab province. Beijing is also currently working to install a second power reactor of the same capacity there. In ten years, Pakistan plans to produce up to 8,000 Megawatts of electricity using nuclear energy.

China’s massive foreign currency holdings make it a prime candidate to inject much-needed cash into Pakistan’s economy, where inflation running at 25 percent has wrecked the government’s finances and exacerbated a trade gap that is fast eating up the country’s foreign currency reserves.

China is already a leading source of investment for Pakistan. Bilateral trade between the two countries topped US$7 billion last year, with a goal of reaching US$15 billion by 2011.